today, in my lighter moments, i was browsing the life insurance association of singapore website (http://www.lia.org.sg) and the following quiz on life insurance caught my eye:
question:
What can happen if a customer does not tell the life insurance company all about his health/medical history and current status?
True or False: The customer is not penalised.
as a financial professional, i clicked 'false'.
what is the correct answer?
my comments:
False is correct! The insurance company has the legal right to decline the claim and regard the policy as if it has never existed
but to my surprise, there were 22 who clicked true, out of a total of 141 who responded to the quiz, myself included.
this represents 16% of consumers who are rather 'clueless' on insurance where contracts are based on the principle of uberrima fides (utmost good faith) and insurability.
and this is why i have to turn down business, (and believe me, some of these can reward me with a good five figure commission) when the person/s in front of me is in disagreement on full disclosure of material information.
because i can't imagine a worst possible scenerio to start-off with any potential client (without full disclosure) and when the crunch comes, what matters the most to the client is having the peace of mind knowing they have a contract that is fully binding with the insurer.
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